VW to review procurement after supplier dispute halts production

Volkswagen’s chief executive has said the car manufacturer will review its procurement strategy after a supplier dispute stalled production in half a dozen factories.

Matthias Müller, who was appointed CEO in the wake of the diesel emissions scandal, told reporters VW would re-examine contracts where the company was left dependent on a single supplier.

“We will of course look into questions such as multi-sourcing,” Müller said, according to Reuters.

The vulnerability in VW’s supply chain was made apparent when two relatively small suppliers halted deliveries of seat covers and gearbox components, allegedly in response to VW’s refusal to pay compensation for abruptly cancelling a high value order. The two suppliers were subsidiaries of the same parent company.

The incident caused disruptions at six plants across Germany making the company’s popular Golf and Passat models, and forced the company to put almost 28,000 staff on reduced hours.

“One could discuss at length who’s to blame for the fact that this situation went belly up,” said Müller, who declined to comment any further on the dispute.